Wall Street Journal criticizes EPA after biofuel ruling

Posted on January 30th, 2013

An opinion piece in the Wall Street Journal says the Environmental Protection Agency might as well task the biofuel industry with providing mermaids.

The article was written after Fridays D.C. Circuit Court of Appeals decision that said the EPA had abused the law with an unreasonable exercise of agency discretion and vacated the 2012 cellulosic ethanol mandate.

Ethanol is one of the only products in history that Congress subsidizes and mandates at the same time and the court has ruled that the EPA is illegally giving the lobby extra benefits that Congress never intended, the WSJ piece stated.

The 2007 Bush-Pelosi energy bill required blending fuels that can allegedly be made from switchgrass or farm waste into the gasoline supply, though no companies produced the product at a commercial scale.

Six years later, little has changed. The cellulosic ethanol industry produced zero gallons in 2011 and zero in 2012. But the EPA still required oil companies and refiners to buy 6.6 million gallons in 2011 and 8.7 million in 2012  and then to purchase millions of dollars of “waiver credits” for failing to comply with a mandate to buy a product that did not exist.

In writing the law, Congress included a safety valve and told the EPA to set the mandate to meet “the projected volume available” in the event of a shortfall. But the EPA nonetheless argued that accurate projections would undermine “the objective of promoting growth in the industry” and creating “the appropriate economic conditions for the cellulosic biofuel industry to grow.”

In other words, only a fantasy mandate will motivate the industry to make enough of a fantasy fuel, the WSJ opinion piece stated.

The three-judge panel found “no basis” in the law for such a dispensation and scored the EPA for “the adoption of an entirely new goal” that it simply invented.

“Apart from their role as captive consumers, the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry. ‘Do a good job, cellulosic biofuel producers. If you fail, we’ll fine your customers,’ ” Judge Stephen Williams wrote in the court decision.

Since the EPA is making things up, the rational way to set the mandate would be to fine the cellulosic folks for a lack of mermaids and rebate the money to consumers who are paying higher prices because the oil companies can’t do the impossible and buy an imaginary fuel, the opinion piece read.